Why Hybrid Marketing Agencies Rule the Consulting World (and How to Prepare Your Agency for Domination)

Six. That’s how many types of agencies exist in the consulting realm, explained Paul Roetzer of PR 20/20 during his session at Content Marketing World, “Building and Growing Your Content Marketing Agency and Consulting Practice,” which was based on his book, “The Marketing Agency Blueprint.”

Of all the players in the above agency ecosystem, one is destined to prevail: the disruptor.

The disruptor shakes up the industry, approaching consulting differently and threatening the well-being of the other types of agencies outlined above. Roetzer dubbed these disruptors the hybrids — agencies that are agile and quick to offer integrated marketing campaigns with the end goal of bringing in more revenue for their clients. No tactics, no shortcuts. Just results.

These hybrid disruptors are changing the consulting landscape. The question is, are you in or are you out? Here, I’ll break down the takeaways from Roetzer’s session, outlining what makes up a hybrid agency and how you can set your firm up for disruptive success.

The opportunity that is a hybrid agency

Large marketing agencies are slow-moving beasts. They are in too deep to change their internal structure into one that allows them to be agile enough to respond to an ever-changing online marketing industry.

Large firms will never be hybrid agencies. So how do they respond? They buy up smaller digital agencies in order to meet the needs of their clients. They buy their way into being hybrid, and that, my friend, could be an opportunity for you in and of itself.

But say you want to fend for yourself and dominate the hybrid agency scene. How could you possibly succeed in a burgeoning industry with intense competition?

The truth is, most smaller agencies that are primed to become hybrids don’t want to change. They are led by people who just want to get by; who are content with the 9-to-5 lifestyle. They don’t have the skin to be progressive; meaning, the hybrid agency landscape isn’t as competitive as you would think.

What makes a hybrid agency?

Hybrid agencies can be broken down into seven basic characteristics:

1. They’re more tech savvy. Digital is engrained in their DNA. Hybrid agencies are made up of tech enthusiasts who have their finger on the pulse of a constantly changing industry. They are quick to test new products, tools, and processes in order to be more efficient. In order to consistently be on the cutting edge, they almost always apply the agile marketing methodology to their work flow. They move fast, leaving those that can’t keep up in their dust.

2. They offer integrated services. Hybrids don’t do one-off projects or short cuts. They remove silos that exist among SEO, content marketing, PR, and social media in order to deliver the whole package to clients. And I’m not talking sporadic campaigns around each of these specialties — they develop long-term strategic plans to overhaul their clients’ marketing departments and ensure that they are seeing results where it matters: leads, revenue, and cost savings. They think like the end user and don’t get caught up in the minutia of social shares or links, because at the end of they day they understand revenue-changing conversions are the only movements that matter.

3. They have versatile talents. Hybrid agencies understand they are only as good as the sum of their parts. Employees are their No. 1 assets, and they make sure to build an expert team that can deliver integrated campaigns. And if they don’t have the capacity to offer a certain type of service, they will partner with relevant agencies that can. They believe in integrated service to the core and won’t stop delivering just because of a lack of resources.

4. They ensure diversified revenue. Why do they preach integrated services so much? First, they believe it’s the right thing to do. Second, they understand it allows for multiple revenue channels. Hybrids believe no company should rely on only one source of revenue. They build internal teams that bring in different types of projects, and they all work together in order to deliver the full package to clients. They believe this so much that they make sure no new client is more than 20 percent of revenue because if the client leaves, the hybrids know they will have to fire employees. And they won’t jeopardize their No. 1 asset.

5. They are committed to clients. Just as they are committed to their employees, hybrid agencies are fiercely committed to their clients. They understand that loyal clients lead to higher retention rates, greater profit margins, more predictable cash flow, and stronger referrals. Thus, they do everything in their power to ensure they gain their clients’ trust. They are in the business of long-term relationships with clients and truly affecting change… not just making the monies via a revolving door of in-and-out clients.

6. They live and breathe an entrepreneurial culture. Hybrid agencies live by the tenet, case studies are rarely written about conservative companies. As such, they create a culture that fails fast because they understand someone or something will eventually disrupt their agency… might as well be them. They also know fear of failure trickles down to employees and into client campaigns, so they make it safe for employees to be innovative. They build an environment that cultivates their No. 1 asset, giving employees the freedom to make decisions and take ownership of projects.

7. They are strategists, not tacticians. Hybrids won’t take on clients looking for tacticians hell bent on delivering quick win schemes. They take themselves seriously as strategists and won’t tolerate clients who request anything less. Even when under pressure, hybrids stay true to being consultants, and can steer a client into the right direction with finesse. And at the end of the day, the client respects them for it.

Oh, and RFPs? Hybrids won’t touch ’em. They understand the ability to develop strategy is their greatest asset (behind the employees who develop them). Why would they give it away for free? They take being strategists seriously and expect their clients to do the same.

How can you become a hybrid agency?

Besides embodying the seven characteristics outlined above, there are some actions you can take in order to develop a hybrid agency’s core competencies.

Move away from an hourly payment structure. Billable hours are tied to outputs, not outcomes. Marketers are multi-taskers at heart, and distractions lead to higher costs and lower quality. Clients paying on an hourly scale are paying for your team’s inefficiencies. For example, one person takes 3 hours to do a press release, another person 7 hours. If both are of equal quality, why is the client paying for that inconsistency in your workforce? By being transparent and eating costs where appropriate, you will build trust and retain clients.

… But don’t lose efficiency measurements internally. However, working in “billable hours” internally is useful as a way to make sure no client project gets left behind. By having employees log time, you’ll be able to make sure your team is working as efficiently as possible to make sure you don’t overwork a project.

Make your agency a career destination, not a stepping stone. Remember, employees are hybrids’ No. 1 assets. As such, hire on the right candidates and constantly focus on retention, honing each of their skills and giving them room to grow. When hiring, you want to hire A-players who are hybrid workers themselves. The important traits of a winning hire are:

Analytical

Creative

Instrinsically motivated

Listener

Web and tech savvy (or incessantly curious)

Strategic

A team player

A writer

“Writer” is bolded above because it’s the most important hard skill for a new hire to have. Think about it: Most of what we do comes down to copywriting. From writing copy for social media campaigns and promotional emails to developing client reports, writing is one skill that creeps into every task a content marketer will encounter. Since good writing skills are developed after years of practice, look for writers (journalists? Even better!) because you can always teach marketing.

Revise what you report to clients — talk in their terms, not yours. Stop reporting on outputs and concentrate on outcomes. At the end of the day, your client needs to prove conversions. This includes metrics like total leads, cost per lead, and sales. Particularly if your point of contact needs to report to a CMO, give him something he can bring back to his boss.

So stop reporting on minutia like links or rankings and take your measurements all the way through your clients’ sales funnels. It will build trust and make sure your agency is taken seriously as strategists.

At the end of the day, hybrid agencies are the consulting firms of the future. If you’re in the position to develop into a hybrid agency, do so now in order to set your firm up for sustainable success. And if you’re not, best start asking yourself why and figure out a way to become one or acquire one fast.

Author: Adria Saracino

Adria is the Head of Outreach at a creative internet marketing agency. When not connecting with interesting people on the web, you can find her writing about style at her personal fashion blog The Emerald Closet. Follow her on Twitter @adriasaracino and stay in touch.

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Great recap, Adria! Thanks for taking part in the workshop! CMI put on an incredible event.

http://twitter.com/adriasaracino Adria Saracino

Thank you, Paul, for a very inspirational workshop. CMI did put on a great event, did you get to go to any events?

http://www.facebook.com/kellydrill Kelly Drill

Excellent piece! I wanted to throw a time tracking suggestion out there. Our firm uses Hours Tracking (http://hourstracking.com). It’s scalable and affordable ($1/mo/user), especially important if you’re only tracking hours for ‘internal’ purposes. I use it for freelance projects as well.

In your opinion, what are the main factors that lead a growing agency to lose it’s advantage of flexibility that made it succeed in the first place?

I see many agencies that fancy themselves as agile, but their results (and outside perception) would indicate otherwise. Complacency, obviously is often the root, but what do you believe are the observable indicators that growing agencies should watch out for?

http://twitter.com/adriasaracino Adria Saracino

Thanks for your kind words. One of the other session speakers said it well (name alluding me right now) when he said that content is a culture…I believe a lot of it comes down to the culture of the agency and how it empowers it’s employees to be decision makers. As agencies grow, the more hierarchy and sign-offs that get involved, the more difficult it is to get teams to communicate. And on the other side of the coin, sometimes these new teams communicate TOO much, in the case that there is a lot of sign off that needs to be had and everyone feels they need to put their voice into it (making the turnaround time almost unbearable!).

In addition to hierarchy and the red tape that comes into play when more sign offs are introduced, culture is a big part of it down to the employee level. Agencies that don’t empower their employees to take ownership of something they think is right and just “ship it” often see that the culture turns into a revolving door of the same in and same out sort of projects, because over time the employees have been beaten down and don’t feel empowered to be innovative. So culture is a big part of it, making sure employees – even if not managers – can be leaders, and empowering them to fail fast and be innovative.

So key things to look out for:
– Is your team consistently delivering the same sort of projects, or are they pushing the envelope?
– What’s the sign off process to get a project pushed through from brainstorm to execution? The longer it gets, the less agile you’ve become.
– Can all employees still have direct access to the decision makers of the company? Are they empowered to make decisions by themselves? The more rings in the ladder employees need to go through, the harder it will be to be agile. The harder it is, the less likely they will be to speak up over time.
– Are all your teams running on the agile methodology? This may sound like a small thing, but especially as more teams and voices are involved, “processes” need to be meticulous and followed like a drill sergeant, especially in the agency setting where so much is going on. Loose structure makes it easy for teams to “forget” to involve other people, and the communication can break down. Or alternatively, less procedure allows one team to bulldoze the other, which isn’t always constructive. Empower communication and stick to a quick procedure that only involves the people that absolutely need to be involved. And I want to note, there are some that thing “processes” slow down agile, but I disagree. From personal experience, your employees job shouldn’t be fighting their way internally into a discussion they should be a part of – it should be to ship projects so make it easy for them to get it done.
– As you grow, are you doing other “morale” events to put a face to the team? Especially if the teams are remote, you need to do non-project related team building things to make sure they are working together – think meetups, morale events, etc. Gamify if needed.

Hope this helps!

http://twitter.com/JosephRanseth Joseph Ranseth

Adria, this is beautiful. Thank you for taking the time to share this. This could have been a blog post on it’s own. 🙂

I’m of the same opinion on each of these topics and think it’s worthwhile for any agency to review and evaluate themselves against them. Like anything, these all underscore the importance of finding what I like to refer to as “an aggressive balance.”

Kasim

Fantastic article! Our firm has been dealing with the growing pains of becoming a hybrid agency (which is a great problem to have) and have run into a few of the “issues” you discuss above. One of the items I’m interested in exploring, and I realize this is a pretty specific question but was curious as to whether or not you had any insight, was project management applications available for the new type of hybrid agency. Right now we use basecamp and its great but it doesn’t meet all of our needs, especially as we grow and begin to add service offerings. Is there anything out there that’s able to assist with managing an integrated workflow? Everything that I’ve found online is built for linear processes…

http://twitter.com/adriasaracino Adria Saracino

Hm, that’s a tough one because we use agile and not as much linear. I know Paul uses Base Camp, sorry it hasn’t been the best option for you. We tend to use Trello, which we adopted from software developers, but I’m not sure if that’s what you are looking for. What needs do you need to address that something like Base Camp isn’t serving?